HL Deb 15 December 1959 vol 220 cc385-96

3.5 p.m.

Debate resumed.


My Lords, I think it is unlikely that anybody would speak on this Bill and do otherwise than give it a blessing. It happens that when the Government come to this House for authority for Post Office expenditure it gives the Members of the House an opportunity which does not often present itself, to raise matters germane to the telephone. Certainly we are all indebted to the noble Lord, who gave us relief and encouragement in his explanation of how we may hope for improvement in the facilities for the long-distance telephone—and, incidentally, it would be more progressive if he could introduce the term"long-distance" instead of"trunks". But the noble Viscount the Leader of the Opposition, in giving his blessing to the Bill just now in the interesting talk he gave us, did not refrain from using the opportunity to"needle" the Government with the statement that the promised improvements could be accelerated.

Those of us who have spent a good part of our lives in North America, who are habituated to the system of prompt long-distance calls and are familiar with the gap between the service here and the service in the United States—the latter being so much in advance—have certainly been encouraged in recent years to see that gap progressively narrowed by the enterprise of the Government and by Government expenditure. In North America one is able to ask for a long-distance call and then hang up, knowing that one will be called when it is available. In this country, however, when one wishes to spend money on the telephone, one is told by the operator to hold on; and, having done so for many minutes, one is then asked,"Are you there?" That makes one inclined to say,"Where else do you think I would be?" In North America the operator would say,"Hello", and not irritate the one wishing to spend money by asking,"Are you there?" It is on that particular point that one feels there could be some improvement in the existing service.

I should like to ask the noble Lord whether, in reporting to his right honourable friend the discussion which I hope will ensue on this Bill (and perhaps this may be less controversial, because I see my noble friend Lord De La Warr in his place: and in his time as Postmaster General we had some quite enlivening discussions on the Post Office, and evidently the advance in service to-day is not likely to duplicate that), he would give consideration to applying in England a practice which exists, and has for long existed, in North America. I would suggest that the reduced charges applicable after six o'clock on all days here should apply all day on Sundays, because recent figures of the telephone receipts on an ordinary week-day, as against receipts on a Sunday, seem to support the belief that the existing services are far from employed to the full on a Sunday; and were the reduced rates introduced, it might well be that the revenues would be appreciably increased and that total advantage to the service might accrue. It is because of that experience in North America, and the belief that it adds to the revenue— it certainly increases the value of the service—that I beg to support the Bill.

3.10 p.m.


My Lords, perhaps I may intervene in this discussion for a moment or two. I think nothing is so discouraging for the staff of any industry than to find that when their superiors talk about it they constantly criticise it. I followed what my noble friend Lord Barnby said about America, and of course the speed with which one is put through from one part of that continent to another is quite remarkable. But I wonder whether the noble Lord ever had any letters sent to him when he was there. It is a reliable service, but you get a delivery once a day in New York. We do a great deal better than that. I share with the noble Viscount, Lord Alexander of Hillsborough, a complete mystification about Post Office finance. I once had the honour of being one of four people who advised the Postmaster General on financial matters. I strained hard, but I never really understood the financial position. I came to the conclusion that the Treasury were determined that I never should, because the whole system of Government financing, as presented to committees or to the public, is such that a business training, however long, is no use in enabling you to fathom it.

What I really rose to say, however, was this. This is the season when the Post Office are put to a strain which very few private businesses would like to undertake, even although it were profitable. I have been amazed not only at the efficiency with which this Christmas trade in postal deliveries is run, but at the way in which the staff behind the counters, not only in the large cities but even in the small villages, keep their heads and deal with their crowding customers who sometimes want stamps, but sometimes want all the other things that the post offices provide. They take the whole burden with such cheerfulness that I feel it appropriate that on this occasion we should pay them a compliment.

3.13 p.m.


My Lords, if one ex-Postmaster-General in this House may be allowed to make two or three remarks, they would be these. First of all, I should like, through the noble Lord who opened the debate, to express, I am sure on behalf of us all, our admiration at the skill of the research department of the Post Office. The noble Lord pointed out what is being done, and it is true that for a great number of years that Department has led research throughout the world in these matters. When the opportunity comes, I think we should say so.

The second and only other observation I want to make is more in the nature of a reminder. I should like to have an assurance, though I know that without notice my noble friend cannot give it. It is this. For many years past, it has been the established practice of the Post Office, when putting up new buildings—and, of course, the money with which we are concerned to-day is intended largely for that purpose—to make quite sure that they conform to the general architecture of the locality or town. I remember quite well a small village post office which cost more than it otherwise would have done being deliberately built with a thatched roof to fit in with the village street. I have noticed recently some departure from this practice, and I hope the departure will come to an end. It is rather unfortunate that the only instance I should like to quote (it has nothing to do with the noble Lord) happens to be in Chesham Place, where a perfectly monstrous building for a telephone exchange has been put up. It is completely out of keeping with any of the local architecture—not that it is so beautiful—and out of place. I hope, therefore, that in the expenditure of this money in the future the old principle will, so far as possible at any rate, be adhered to, and that we shall see, as used to be the case—and still is in many instances—Post Office buildings which are a credit to the locality as well as a perfectly good and suitable building for the devoted staff to work in.

3.15 p.m.


My Lords, we have had some very interesting points raised, and I will try to deal with as many as I can without being too long. I had better start with this question of finance about which the noble Viscount opposite wishes to know. I am slightly encouraged by my noble friend Lord Woolton, in that on his reckoning I need know nothing about it for about 40 years. I will try not to display my own ignorance, but I shall be comforted in knowing that, if I do display it, I am in good company.

I think the easiest thing for me to do is to try to go, very briefly but very simply, through the method by which the Post Office finances are governed, and I hope that in the process of doing that all may become clear. The noble Viscount no doubt remembers that a new relationship with the Exchequer was laid down in 1955. As a result of that, the Post Office endeavours to run itself like a well-conducted business, and seeks to pay its way after contributing a fixed sum of £5 million to the Exchequer—a sum which may be said to correspond roughly to the amount of tax that would be payable if its situation were different.

In addition to that, it was decided if necessary to make proper and prudent provision for depreciation at rates which reflected the current value. A prudent business must adopt a sound depreciation policy. It is not enough to provide only on the basis of original cost of assets, the historical cost, when experience has shown that their replacement costs two or three times as much as that. On the other hand, it is not necessarily vital to provide from depreciation provisions the whole cost of replacement. We adopt a middle course. We calculate each year's depreciation by reference to the current value of the assets, but without seeking to adjust previous years' provisions to the new level. We think that that policy makes for price stability, and therefore enables the Post Office to finance a substantial proportion, which is over 50 per cent., of its capital expenditure, without recourse to borrowing.

In addition to that depreciation, provision has also to be made fully for pension liability. The surplus, if any, after meeting these objectives, is retained as a reserve owned by the Post Office. I hope I have not over-simplified the matter, but at the same time I hope I have made it clear.


My Lords, I am going to read it very carefully and have another go at it, but I am not at all sure. I do not expect the noble Lord to say more, but when I hear his report of the fixed contribution I cannot make up my mind whether or not you have really paid £5 million to the Treasury every year since 1955. I understand that that is so. And yet you show a deficit. On what real basis is this £5 million assessment made?


I feel that I am going to be in a muddle if I am not careful. As I understand the matter, it was decided (at a time when I, personally, was at a slight disadvantage, because I was in no way responsible) that it would be a fair thing that the Post Office should make that contribution to the Treasury. We have to remember that here is a business with a turnover of over £400 million a year, so that in fact it is not what one would call in a normal commercial sense a most tremendous burden on that business. I think that that is the kind of basis. It is easier to make a flat rate, and by my analogy with the tax situation it could be, so to speak, win or lose; the Post Office could be, as I see it, in a better position or a worse one compared with a private business, but probably, taken over the years, it works out as a fair arrangement.

I should like to turn to this question of surplus, which is in credit, as the noble Viscount pointed out, for The first time since the new arrangements came into effect in April, 1956. I would put it another way, very simply that it has taken, in fact, three years to build up to that reserve position. That reserve belongs to the Post Office, and I should have thought it quite a modest cushion to be held by a business with the turnover I mentioned, over £400 million. The existence of that reserve may well be said to be a benefit or a potential benefit to all the customers, and I think it is a reserve which certainly should be held. I agree that the postal and telephone accounts both showed surpluses last year and contributed to that, although the telegraph service did not. The overall general result is very much in line with what was expected when two years ago the charges had to be raised in order to meet the cost of bringing the rates of pay in the Post Office into line with the rates outside.

May I go on from there to the question of priorities, which the noble Viscount asked about—what we plan to do in this respect, in spending the money to be raised under this Bill, and particularly in regard to the telephone service. While resources are limited, and naturally we cannot have more than our appropriate share out of the available total, there must be said to be priorities, but I think we should say in the main, that even so, the problem is less one of actual priorities than of planning an orderly advance over the whole field, which is a very wide one. This is partly because the telephone service is a very complex organisation over the whole country and partly because the service is growing so rapidly. Your Lordships, I think, will appreciate the complexity and the complications of the system and I do not think I need go into that at all.

If I may give some facts of the growth of the system, I think they may be helpful. These developments which have taken place in the last ten years are quite interesting. The total number of telephones connected to the system has increased from 5 million to 7½ million. The pairs of wires in local cables have increased from 4½ million to nearly 7 million. Trunk circuits have increased from 16,000 to 26,000. Local and trunk calls have risen from 3,000 million a year to over 4,000 million a year. Eight hundred manual exchanges have been converted to automatic working. That is ten years' progress. I quote it to back up my point of how the orderly advance over the whole field is really more to the point than putting down a positive list of priorities, one below the other.

The main point I should talk about, and I think perhaps your Lordships would regard it as the main job of the Post Office, on the telephone side at any rate, is the reduction of the waiting list. Ten years ago it was nearly half-a-million people. When I first had the honour to introduce a Post Office Money Bill to your Lordships, in 1955, it was about a quarter-of-a-million people. At the time of the next Bill in 1957 the figure had dropped to 110,000, and to-day the actual waiting list—I am coming back to this in a second—is of the order of 50,000 people. The noble Viscount mentioned the figure of 160,000. I do not want to quibble on this one, but that is in fact the order list, and there is a subtle difference between the order list and the waiting list, in that of that number 80,000 to 90,000, or a few more perhaps, week in, week out, are in process of provision; the order has been given to the electrician to go and put the instrument in. That I regard as the order list. The waiting list is composed of those people in regard to whom the order has not yet been given to the electrician for one reason or another, and that list is round about the 50,000 mark.


My Lords, might I ask the noble Lord to say how long it will be before those 50,000 get their telephones? The reduction of the waiting list is very spectacular, but if it does not mean a reduction in time it does not mean a great deal.


My Lords, may I ask the noble Lord whether it also includes party lines, from which we all suffer?


In the first place, there is a very considerable turnover in the number I mentioned, and I think it would be reasonable to say that the majority of those 50,000 will get their phones within a year. I can certainly say that the hard core, so to speak, who have been waiting for a telephone for more than two years is under 10,000. Party lines come a little more quickly; that is the point of the thing. But the situation has improved considerably, and it is not usually necessary to insist, if people are going to have a phone, that they must have a party line. Certainly three out of four applicants can be offered an exclusive line now, which I think is a very good thing. Whether we can manage to keep this rate of progress going or not will depend entirely on the rate of demand. At the moment two-fifths comes from businesses; that rate is running at the highest we have known for four years, and reflects, I think, some measure of rising prosperity in the country. We are connecting new customers at the rate of more than 1,000 a day and I hope we shall be able to keep that up.

The noble Viscount mentioned that after the increased tariffs were announced in 1957 300,000 people gave up their telephones. I should not like to try to contradict him in any way, but the best estimate that I can make of the number of people who gave up their telephones because of the increase in the tariff charges was about half that number; I should say about 150,000. That is the best I can do. Between October, 1957, and April, 1959, 450,000 people gave up the telephone; that is in the period after the tariff went up. In a similar period before the tariff went up 300,000 people gave up the telephone in any case, knowing nothing about the increased tariff; and I think the real answer, if that is so, is that the rate of demand is now, as I have said, very high. There has been a tremendous increase in the figure for October of this year. The new demand figure was over 41,000, and it has been the highest monthly figure in the last four years.

I should like to digress for a moment on the question raised by my noble friend Lord Barnby. I think his use of the term"long-distance" instead of"trunk" is a most retrograde step. I do not think that we should be talked by him into using three syllables where one would do. I was also glad to hear from him that the American service has improved so much since I was there some eight years ago. I certainly was not particularly impressed with it then, and I was glad to get home, where one can hear a British accent. But perhaps that service has come along. I thank him for pointing it out. At any rate, we do not feel very inferior to anybody.


My Lords, in regard to the noble Lord's respect for brevity, would he also apply the same observation to"Hello" instead of"Are you there"?


My Lords, I will take this point up with my noble friend later. I do not want to waste the time of the House. I shall ask him, when I talk to him about it, what other expression, so brief and so terse, could one possibly use to find out whether the caller is still there.


What would the noble Lord do if the answer was"No"?


I will resist the temptation to answer that. My Lords, if I may resume my reply, may I say that the broad plan for the future is to continue to add plant to meet the growth of traffic and of orders for service from new customers, and at the same time to continue the plans for mechanising the service over about the next ten years. I come now to another point of the noble Viscount. This programme of mechanisation will cover the conversion to automatic working of the remaining 1,000 manual exchanges. It sounds easy to say."Let them be mechanised"; but may I put it this way? When you think that it means mechanising two exchanges every week from now until 1970, that indicates a little the problems that are involved in the job. The noble Viscount mentioned the Enfield exchange. I am happy to be able to tell him that the automatic equipment is now being installed and will be completed by the autumn of next year.

The noble Viscount also queried whether it was a good thing to introduce subscriber trunk dialling in some parts of the country while in other parts customers are still waiting for the first stage of conversion from manual to automatic exchanges. Naturally we should like to convert all the manual exchanges as quickly as possible; but even if there were no difficulties in the way, such as money and technicalities and so on, the programme would still need to be spread over several years. I should like to add that wherever possible and wherever suitable, exchanges are being, and will be, converted direct from manual to S.T.D. It will not always be possible in the intermediate stages to cut out what one might call ordinary automatic.

The effort to build and equip exchanges, with all the other work that goes on with it, is really considerable, and to compress the programme into a shorter space of time will not only be extremely difficult but will also have the effect, of increasing redundancy problems, both while it is being done and when it is finished. At the moment that problem is fully under control, and I should like to recognise now the full co-operation and help that we have had from the staff associations on the matter. Briefly, then, we are aiming to spread our investment resources over a carefully prepared long-term plan of exchange mechanisation and at the same time to expand trunk and local networks to meet the increasing demands which are being made by existing customers as well as the new demand for service. I hope I have managed to make it clear that this sort of balance is essential.

My Lords, the noble Viscount had a final point—namely, about the security of mail in transit. I should like to deal with this. He will understand if I do not go into any detail of the measures that the Post Office now takes, or in fact that it proposes to take—I think it would be extremely unwise to do so—but I would say one or two things. In the course of a year 350 million bags of mail are moved about this country, and with operations on that scale it would be extremely difficult to avoid some losses. We all know—there have been debates about it, quite rightly, in your Lordships' House—that crime in general has recently been on the increase, and I do not think that we can hope that the Post Office will escape some share of that increase. But, on the other hand, I am glad to say that whilst in the year ended on March 31, 1959, the number of bags lost was somewhat greater than had been the case in the two previous years, the loss in all those three years was about half what it was in the early 1950's. That applies both to ordinary mail and to registered mail.

The problem of safeguarding the mail is not easy. I do not want to sound defeatist, but I do not know whether it can ever be finally settled. One has to go on trying to devise new procedures and arrangements to give security and to keep on checking them and overhauling them. Even then, there is room for a human failure which is bound to occur from time to time. I do not want to sound defeatist or complacent. So long as there are any losses at all, the Post Office cannot be satisfied. I would assure your Lordships that the Post Office, which in this matter has the willing co-operation of its staffs and works closely with the police and with the British Transport Commission, fully realises the great importance of providing maximum security, and proposes to go on doing its utmost to do so. My Lords, I think I have now said enough—


My Lords, I accept the noble Lord's reply in general on that point, but I think that the specific incident which I mentioned, as reported in the Press, seemed to require some precautionary measures in future to deal with that particular class of incident. I hope that an indication can be given that that will be done.


My Lords, I am certainly most ready to listen, as will be my right honourable friend, to what the noble Viscount has said. I cannot believe that action would not be taken on what he suggests—in fact, I cannot think that action has not already been taken. But one must remember that this is a constant war, and that sometimes somebody scores a small victory. One hopes that, on the whole, one is going to score many more victories oneself. The noble Viscount need not feel worried that the matter will be just left and that more and more will be stolen.

I feel that that is enough to make good my claim that in the main fields of Post Office activities progress is going on. In that, I believe, we are very fortunate in having the fullest co-operation and support from the staff associations. We are very fortunate in the abilities of the officers of the Post Office at all levels who are all working very hard to improve the service. We know that it is not yet perfect. We can only go on trying to improve, and an inducement to do so will be the words used by the noble Viscount with which I should like to associate myself—particularly as Christmas is approaching—in praise of the people of the Post Office. I would wish to endorse what has been said by the noble Viscount and other noble Lords upon that.

On Question, Bill read 3a, and passed.